Woodford top 10 holdings

Tuesday, Jun 18 2019 by

I thought it would be interesting to look at the Woodford holdings and their share price direction, possibly revisiting this later, so this is really a stake in the ground which I'll revisit if my interest is sustained. Will buying opportunities show up? I guess the answer to that is yes, eventually!

Information beyond the top 10 in each fund is tricky to get now and this only covers Equity Income and Income Focus. This also only covers UK listed companies where I've managed to get the historical price information.  

The first chart for each company is Weekly Heiken Ashi candles. Heiken Ashi smoothes the price points and is thought by some to give a clearer indication of prevailing trends. The purple line is when the Equity Income was suspended. The blue and orange dots are just a visual cue as to peaks and troughs and aren't significant. Originally these were accompanied by log based point and figure charts for additional time/space but width is the limit here, so I left these out as most are unfamiliar with them.

The second chart in each set is daily relative return strength measured against the FTSE250. Actually as a proxy for this I've used iShares FTSE 250 UCITS ETF, as I can get data on this and it is pretty close. The line is indexed against its own value 3 months ago (I mislabelled this). Momentum investors would generally want to see this climbing over several months.

Most holdings weren't looking too healthy prior to the suspension of Equity Income. 

First of all those companies held by both funds. Clicking on the image should open them in a new tab if you want detail but this doesn't work for me (right click instead). 

Starring in these are Provident Financial (LON:PFG) , Taylor Wimpey and Barratt Development. The small images can give you an overview ...

Provident FinancialTaylor WimpeyBarratt Developments

So those three aren't looking technically healthy. Interesting to see the close tracking of the two house builders. More on house builders later.

Next up are three from the suspended Equity Income. 


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6 Posts on this Thread show/hide all

andrea34l 18th Jun 1 of 6

I frankly find it quite a staggering list of companies - EVEN I can pick a better set of investments than that! In fact, I'd wonder if one took some darts and threw them at  the share price pages of the FT whether one could pick more promising companies to invest in....

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wilkonz 19th Jun 2 of 6

I'd wonder if one took some darts and threw them at the share price pages of the FT whether one could pick more promising companies to invest in....

Without doubt Andrea. Burton Malkiel in 'Random Walk down Wall Street' demonstrated that a dart throwing chimp (i.e. a tracker fund) could outperform 75% of active fund managers. In Mr Woodford's case a passive tracker fund (or a dart throwing chimp) would have outperformed him by around 40% against his benchmark. 

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HumourMe 19th Jun 3 of 6

In reply to post #484671

I frankly find it quite a staggering list of companies - EVEN I can pick a better set of investments than that! 

I came to a similar conclusion and thought that he could have saved himself some trouble by buying a UK property ETF . That, picked at random after a quick google, follows a path similar to the house builders, but with less downside/volatility. Roughly 18 months below for comparability.

Possibly he didn't due to diversification/reporting requirements.

However, there was a large concentration in property, which, if as a sector, it had gone the other way, would have kept his reputation


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Firtashia 19th Jun 4 of 6

Good article, thanks. If I was a prospective investor in this fund I would like to think that, as a professional, he has some sort of consistent stock selection process and there is something common to all his investments. I wonder what is his process, can anybody spot the common denominators ? What has Eve Sleep got in common with Taylor Wimpey? Humour Me alludes -tongue in cheek- to negative share price momentum but a lot of them have seriously tanked after he had bought into them. I couldn't spot anything so the cynic in me suggests he's adopted a scattergun approach, not something I'd be prepared to pay a fee for.

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covkid 19th Jun 5 of 6

Whatever his approach to stock selection is it obviously hasn't worked this time...............perhaps his previous success whether planned or just plain lucky has gone to his head to the point that he thought his picks would always be successful !

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wilkonz 19th Jun 6 of 6

In reply to post #484846

I wonder what is his process, can anybody spot the common denominators ?

Yes. There's nothing random about his approach - otherwise he wouldn't have drifted away from his bench mark. And all would have been fine, and his reputation would be intact.

I can pick out two investing traits.

One is his liking for long shots such as Purple Bricks and Allied Minds (or Sucker Stock as Stockopedia calls them). 

The other is his contrarian selection of 'unloved' stocks with falling prices but good 'value' metrics like low PE ratios and low Price/Book ratios. The AA for example has some good metrics if you overlook the tiny profits and vast debts. He is clearly hoping for some of these companies to turnaround, multibag and save his fund. Unfortunately for him and even more for his investors, he managed to single out a bunch of losers. Ironically he would have done much better shorting all the stocks he picked.

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